According to few credible sources and publications, each year there are between 2787-3500 whistleblower cases filed that cost Corporate America for their mistakes in handling Whistleblowers between $4.5B – 6.0B dollars annually, split between government fines and whistleblower rewards. In many cases, the reality is that the company is not the “evil empire” that is out to get the “people”; rather, it is that in each company there are some “evil people” that are guided by greed and malice. As the saying goes: one rotten apple can spoil the whole batch.

Since the 2008 financial crisis, whistleblowing has become an industry. Between employees, attorneys, and other consultants looking to profit, it has really gotten out of hand. It has moved from people wanting to make a difference simply because they care, to an opportunity for personal profit.

Why do you ask? Well, our assertion is that Corporate America did not learn yet few critical facts:

• In today’s social media culture, it is impossible to get away with anything. You might think that you can control information; the reality is that you can’t.
• Corporate executives do not understand the fundamental context of transparency and visibility. It is not just a catchphrase; it is the reality we are living in. You are transparent whether you acknowledge it or not.
• Ignoring problems or avoiding them does not solve anything; to the opposite, it makes people angrier and more frustrated, making them more likely to act in a vindictive fashion.
• The majority of whistleblowers are not bad people; they are people committed to making a difference, not to take a company down. They act because they care.
• Not offering a solid outlet for employees to report critical information to their management in safe and secure ways, without the risk of retaliation, is the biggest risk of them all.
• Not acting on critical information and employee feedback creates a negative culture that leads to low morale and very low employee loyalty.

So, what is the solution?

Instead of spending so much money on legal fees and fines, get in front of it. Be proactive and engage your people in the process. The sooner you know or find out about irregularities and risk factors in your business, the faster you can deploy damage prevention instead of damage control, which is much less expensive. This approach creates a high level of employee engagement that leads to a higher level of corporate trust.

Let your people tell you what you need to know before you are going to read about it on Facebook or Twitter or be a headline news.

What is your company Whistleblowing Policy?